Current trend
Risk-on mood helped the pair to regain its traction. It is currently consolidating at 1.0250 as a result of downward correction for the US dollars. But the focus shifts to a hawkish ECB as inflation in the eurozone remains in line with expectations, which may signal an increase in interest rate at a standard level of 25bps. It is enough to fight price increases, which will support the instrument in the short term. However, the pair lost its traction by breaking below the trend line due to souring mood of the Dollar Index (DXY).

Technical analysis
After dropping below parity level, the pair is trading in a growing wave and is consolidating within a very narrow range. Technical indicators give a signal for the beginning of a correction. A bearish candle is formed testing below 1.0200. Histogram is decreasing and is about to form a downward bar. RSI is in the bearish area and stochastic is directed downward giving further hopes for a bearish correction in the short term. Sellers will look for a closing candle below 1.0204 to extend the decline toward 1.0173 and open the door toward 1.0098. Buyers will look for level 1.0273 and breaking it will open the door toward 1.0335.

Key levels to watch from the upside 1.0273, 1.0335 – from the downside 1.0204, 1.0173, 1.0098